Thursday 28 Mar 2024
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This article first appeared in The Edge Malaysia Weekly on August 23, 2021 - August 29, 2021

YANG di-Pertuan Agong Al-Sultan Abdullah Ri’ayatuddin Al-Mustafa Billah Shah has consented to the appointment of Datuk Seri Ismail Sabri Yaakob as the ninth Prime Minister of Malaysia, after the latter received the backing of 114 members of parliament (MPs) to demonstrate majority support.

Ismail Sabri, to be sworn in as PM on Saturday (Aug 21), does not have time on his side. At most, the new administration will have 21 months before the next general election as the mandate must be returned to the people by May 2023, which is five years after the start of the 14th parliamentary session in May 2018. These 21 months or less will determine how Malaysia fares in the near future as the economy is suffering greatly amid a health crisis brought about by the Covid-19 pandemic.

During this period, the new government must get the Covid-19 outbreak under control. It must ensure that the majority of the population — including foreign workers — are vaccinated, and reopen the economy.

Economic recovery and nation rebuilding will not be easy, particularly as the new administration will have only slightly more than a year to govern.

In a written response to The Edge’s questions, Lee Heng Guie, executive director at the Socio-Economic Research Centre (SERC), says the new PM must ensure the government’s stability, so as to remain focused and not distracted from the implementation of the vaccination programme and the National Recovery Plan. A stable government is essential at this critical moment to overcome the pandemic and to steer the battered Malaysian economy and businesses out of the crisis, he adds.

“The sooner we achieve herd immunity, paving the way for a safer reopening of the economy, the more certain the shape of the recovery. But proactive government policies can improve outcomes,” says Lee, stressing the need to rebuild as well as sustain investor and public confidence and trust by implementing effective Covid-19 containment measures and timely economic responses to limit the financial and economic damage.

The government must also enhance and strengthen pandemic mitigation and containment measures, he says. Stringent implementation of public health and social measures remains the key to curb the spread of the virus, and healthcare facilities should be fully equipped.

“Besides achieving herd immunity, efforts to test, trace, isolate and treat must be scaled up along with communities and businesses practising the SOPs, including social distancing,” says Lee, adding that the government must plan and prepare for booster vaccine shots.

Prof Dr Wong Chin Huat, of the governance studies division at the Jeffrey Cheah Institute on Southeast Asia, says it is not so much what policies the new government must take to ensure the economic and health well-being of the country, but the political structures that will enable them to choose necessary but unpopular policies.

Looking back on the administration of Tan Sri Muhyiddin Yassin, Wong says the former premier started off quite successfully with the first Movement Control Order (MCO), which was reflected in the high approval rating among voters, although it was stronger in the Malay community.

Muhyiddin was seen as the darling of Malay voters then as he demonstrated that a predominantly Malay government could be a global success story in combating the Covid-19 pandemic.

But a major turning point was the Sabah state election, which won his party Parti Pribumi Bersatu Malaysia a chief ministership at the expense of Umno. Wong says the win came at a huge political cost. Moreover, the state election resulted in the third wave of Covid-19 infections in the country.

“In any country, it is tough for a government to remain popular in combating a pandemic of an unprecedented scale. In Malaysia, Muhyiddin’s precarious position and antagonism towards the opposition affected his policies,” he adds.

Therefore, according to Wong, it is important for the new PM and government to work together with the opposition through a confidence and supply agreement (CSA). This would immediately diminish the blackmailing power of not just the “kleptocrats” but also the power of underperforming ministers and rule-breaking MPs, he says.

“To stabilise politics, we need a CSA or a few CSAs before GE15 that must cover four immediate major reforms,” says Wong. These include reforming parliament so that it becomes a platform for inter-party power sharing and decentralising the government.”

A CSA is an agreement or arrangement between political parties that is less formal than a full-blown coalition, whereby a minority party agrees to support the majority party on its budget and confidence votes by either voting in favour or abstaining. This agreement is needed so that the government can function as usual and the ruling party does not fall due to a motion of no confidence in parliament.

Meanwhile, the Attorney-General’s Chambers, Malaysian Anti-Corruption Commission and Internal Revenue Board should be reformed to end selective prosecution which, according to Wong, is one of the drivers of party hopping. There must also be a political funding reform, he adds.

Once the pandemic has been brought under control and it is safer for a full reopening, policymakers must figure out how to fix a shattered economy and safeguard it against the next catastrophe, says SERC’s Lee.

The immediate priority is to craft a swift recovery plan focused on growth, resilience, investment, job generation as well as employee reskilling and upskilling, he says. Vulnerable households must continue to be given appropriate social safety protection in terms of income, jobs and skill support.

Businesses and the people must be prepared for the future. Accelerating structural changes and the transformational push through the adoption of new technologies and innovation is important, as well as an enhancement of skill sets.

The country is expected to table the 12th Malaysia Plan soon. The new government will also have little time to prepare for Budget 2022, which is usually tabled in October.

“Fiscal stimulus under consideration has to be bold, sweeping and comprehensive to create jobs, expand productive capacity and unleash more economic and investment opportunities to restart the Malaysian economy post the prolonged Covid-19 pandemic,” says Lee.

How Muhyiddin fared over the past 17 months

Tan Sri Muhyiddin Yassin, the eighth prime minister of Malaysia, will likely go down in history as the man who led the country during the worst possible time, when it was besieged by political, health and economic crises.

Arguably, no Malaysian PM has faced challenges more dire than the one he faced over the past 17 months. While the first PM Tunku Abdul Rahman did preside at a time when the country faced political turmoil over the May 13 racial riots, he did not encounter an unprecedented global health and economic crisis at the same time.

To many economists and political analysts, Muhyiddin did manage to contain the pandemic successfully in the earlier stages. However, he and his administration subsequently made a number of mistakes that bungled the response system to such an extent that Malaysia is suffering an unprecedented health and economic crisis. The crisis of confidence in the country’s leadership exacerbates matters.

“In Muhyiddin’s defence, governing during this pandemic has been extraordinarily challenging. A number of other states have likewise been unable to sustain initially strong records,” says Dr Meredith Weiss, professor at the Department of Political Science, Rockefeller College of Public Affairs & Policy, the State University of New York at Albany.

“That said, Muhyiddin’s administration has committed several missteps that both set Malaysia back and undercut popular trust,” she says in a written response to The Edge’s questions last Thursday.

According to Weiss, the simple fact that Muhyiddin’s administration came to office during an early surge in cases had left Malaysia without a functioning government at a critical moment. Later, going ahead with the Sabah state election with in-person campaigning, for instance, was a bad idea, she observes.

“Inconsistent, unclearly presented and unevenly enforced regulations have been another endemic problem for Muhyiddin’s administration; letting government officials get away with violations for which ordinary citizens have been severely punished is especially problematic for public trust and morale,” stresses Weiss.

Muhyiddin’s position was never strong and stable in the first place, opines Wong Chin Huat, professor of governance studies at the Jeffrey Cheah Institute on Southeast Asia. Therefore, from the get-go, he tried his best to prevent any voting on his proposals if he could.

“He had a very fragile majority, which was indirectly proven in the removal of the Speaker [Tan Sri Mohamad Ariff Md Yusof] in July and the passing of the budget in November and December. He was not sure if he could hold on to those unreliable votes and tried his best to prevent any voting if he could,” says Wong in a reply to The Edge’s questions last Friday.

“The new Speaker did a good job as his gatekeeper. If he [Muhyiddin] had been realistic, he would have reached out to DAP and the whole of PH in August last year, and offered a CSA (confidence and supply agreement) for his survival, as he finally did on Aug 13 this year. However, he overestimated his resilience and missed the chance to lead the country through the pandemic.”

The Perikatan Nasional government led by Muhyiddin spent a total of RM55 billion in direct fiscal injections under various stimulus packages in 2020 to assist individuals and businesses amid the pandemic. The government then provided another RM5 billion in direct fiscal injection in May this year and RM10 billion in June. While these fiscal injections are welcomed, many argue that they are insufficient given the prolonged lockdown.

Dr Afzanizam Abdul Rashid, chief economist of Bank Islam Malaysia Bhd, says the government has the means to and should roll out more economic stimulus and assistance. “The debts are mostly in ringgit, with 97% denominated in the local currency. However, the government has to give clarity on how it will address the ballooning fiscal deficit and debt level.

“Perhaps, there could be new taxes after the situation has improved at some point in the future. But the conversation has to start early in order to seek feedback. And more importantly, it should avoid surprising businesses and consumers.”

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